The benchmark S&P/ASX200 index fell 46.4 points, or 0.57 per cent, to 8,094.7, while the broader All Ordinaries slipped 36.7 points, or 0.44 per cent, to 8,326.4.
The ASX200 is down 1.8 per cent from a week ago and 0.4 per cent lower so far this year, and made its lowest close since December 20.
Energy stocks led the losses, falling 2.9 per cent after oil prices hit a three-year low, as US President Donald Trump's trade war weighs on crude demand at a time when OPEC+ looks to boost production.
US tariffs on Canada, Mexico and China are expected to continue impacting commodity markets as well as products along the value chain.
"Dramatic shifts in US trade and foreign policy are likely to cause further disruption to metal markets," ANZ senior commodity strategist Daniel Hynes said.
"In the worst-case scenario, this could lead to rising prices for both raw metals and downstream consumer products."
Utilities stocks were also under selling pressure, giving up 2.1 per cent by market close, while the consumer discretionary sector lost 1.1 per cent.
The big four banks were mixed, with CBA losing 1.8 per cent to $153.59 after going ex-dividend, Westpac down 0.9 per cent after a buyback notification, and ANZ and NAB trading flat.
Insurers have continued their red week as tropical Cyclone Alfred bears down on Queensland's southeast coast, taking both QBE and Suncorp more than one per cent lower.
Onto miners, and Rio Tinto clawed back some early losses to finish 2.2 per cent lower at $114.92, after winning approval for its $10.7 billion Arcadium Lithium acquisition. It also announced it will spend $1.8 billion to extend the life of the Brockman mine in the Pilbara.
Regenerative medicine company Mesoblast had a baptism of fire on its first day on the ASX200, falling 7.9 per cent and was the index's worst performer of the day.
Bitcoin's volatile week has continued, rallying more than five per cent to $US92,730. The move came after a US official foreshadowed an announcement on a US strategic Bitcoin reserve expected at Friday's White House crypto summit.
In other news, Star Entertainment is expected to offload its recently opened Brisbane casino to its Hong Kong shareholders to help relieve some of its $400 million debt. Star shares have been in a trading halt this week after the group failed to provide a financial report to the ASX.
The Australian dollar gained against the greenback amid fears of soft US growth, buying 63.38 US cents, up from 62.54 US cents a day earlier.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday fell 46.4 points, or 0.57 per cent, to 8094.7.
* The broader All Ordinaries lost 36.7 points, or 0.44 per cent, to 4326.4.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.38 US cents, up from 62.54 US cents at 5pm AEDT on Wednesday
* 94.42 Japanese yen, from 93.63 yen
* 58.63 euro cents, from 58.82 euro cents
* 49.12 British pence, from 48.88 pence
* 110.51 NZ cents, from 110.68 NZ cents
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